Warning , Warning , Warning , Will Robinson ....Guru Alert

Thanks Gav, appreciate you sharing

I 100% agree that it's an elite pursuit, my mentor made that very clear from day 1 and I had already figured out that was the case by that stage anyway

Re Hedge funds: yes you are right in one sense - it works best for the smaller player as we don't have the liquidity issues of a major fund and can be nimble in and out of the market. The complete TA strategy I have developed is not like anyone else's and is made up of multiple forms of analysis (layered edges) and no hedge fund is ever likely to replicate it. As well as that fund managers often have a mandate and cannot be as accepting of risk or as flexible in allocation as the small player can

In answer to your question what kind of outperformance can be expected, of course that depends on a mountain of variables.....all I can say again is take a look at the site and blog examples and this will give you a fair idea.

Briefly, here are the facts of a specific and verifiable example..... on 20 Dec 2016 I took an entry on 4 stocks all from the same sector (intentionally). The ASX200 index closed that day at 5,613 points. I had recently identified some reasons (rule based) using relative strength that the Gold sector was likely returning to early strength and moving very well as a sector and likely to outperform the benchmark index (ASX2oo) over the coming months and maybe longer. Next I used both fundamentals and relative strength to drill down in to specific stocks within the sector and filter these in to the best candidates for an entry. 4 stocks passed the filters so I marked up the charts and ended up with the following entries:

NCM $17.60
RRL $ 2.48
EVN $ 1.72
NST $ 3.13

Here are the actual trades in my SMSF wrap account. I also took some holdings outside Super in the same stocks. Notice I did not dedicate the entire account or even a large portion to these stocks, in fact the combined exposure is approx.1% (unleveraged) of overall holdings based on my money management rules!! Large cap stocks also received the highest weighting of holdings for risk management.




Today 30 Jun 2017, the ASX200 index closed at 5,721 points. Over the period since I took the entries the index has gained 109 points or 1.94% (accumulation index may have faired a little better but not by much).

In order to not be accused of making big claims I will let you look up the recent prices of the 4 stocks in question for yourself and calculate the % increases over 6 months. I recently took part profit (1/3rd positions) and moved the capital gained down the scale of risk into a long term accumulation MF. Still holding 2/3rds of original positions with plenty of room for more upside yet.

Before anyone asks for further examples....this will be the first and last time I will expose any of my personal holdings on this forum, this is not to be taken as advice. I do so only for verification of the answer I am giving to Gav's question.

DYOR, again not advice.

PS - Just realised this thread has strayed away from the original topic, my apologies. I am happy to move the conversation over to a more dedicated TA thread if need be.

 

The only successful futures trader I knew (mentioned in previous post) was big on Gann and Elliot Wave. Many still struggle to accept these esoteric concepts. Yet this stuff appears to work for those elite few who can master these concepts in conjunction with suitable psychological traits and very disciplined money management.

So I'm guessing that this is perhaps part of what you're referring to? The multiple time frames Fibonacci Trader software he used (and I purchased on his recommendation at the time) is modelled on Gann concepts. My trader friend was so successful he actually had multiple trading accounts so it was harder for others to piggyback off his trades especially with SPI trading.

It's been that many years since I was involved in TA I barely remember most of it nowadays. Plus having reached a very comfortable financial situation in retirement I've gotten lazy and focus more on enjoying our wealth in retirement nowadays than trying to excessively add to it. So I'm reailly nothing more than your typical amateur investor nowadays.

I've been reading some excellent Bernstein material lately. Must be getting more conservative with age. His quote "if you've won the game, stop playing" seems to be starting to resonate well with me now we're retired. Having exceeded our savings goal in retirement protecting wealth is starting to become more important.

However I'll always be interested in learning new things even if it rarely changes how we invest. I suppose reading about investing is a great hobby for me along with other pursuits in retirement.

 

Yes I know exactly what you mean for me it has become a real voyage of self discovery and far more intriguing than I first anticipated.

Re: Bernstein, yes indeed wise words again sir.

 

Worshiping anything or anyone and not taking personal responsibilty is just plain stupid.

No one can tell you what is right for you.
Even the medical profession puts people in a box and generalises.
No one knows your body like you do, no one can tell you what you should be eating, drinking, taking - the key to health is self awareness.

The key to wealth is self awareness.

Rubbishing something because you don't understand it and it does not work for you is self limiting. Everything has a purpose and everything adds to your kbowledge.

Gratitude to all gurus who are teaching us stuff and for their dedication to teach.

The need to worship people is passive aggressive - it sets people up for failure when markets turn. The worshiper then gets to be right while the guru is wrong. This behaviour helps no one, it's stupid.

Expand your kbowledge and take responsibilty about your own finances, health, relationships. No one owes you anything and no one is there to tell you exactly what is right for you. Hell if you are not aware enough to know, how can anyone else be???

 

@Xenia agree it's always and inevitably a personal journey of finding what works for you and what resonates with your character and dare I say it.....is enjoyable.

@austing interesting conversation, the Gann-Elliott combination that your friend favoured is also my mentor's core teaching along with some more modern giants that have extended the structural geometry and numerical principles at the core of Gann-Elliott. Successful non-commercial (private) large position holders in futures markets are almost exclusively discretionary swing traders. They (as do I) use higher time frames and are more akin to 'short term investors' as positions are held for extended weeks and months and into years at times. To me it's about using a well reasoned approach to speed up the entire investment process.

Particularly interesting that you mention the big 'G', a very controversial and over marketed 'name' in the industry. Been reluctant to go too far down this rabbit hole on PC for fear of inciting violence ......what I will say is that the publications he left in the public space are a trail of breadcrumbs that most people can't follow, many are critical that his 'esoteric' seeming techniques don't work as well as they are reported to. If used exactly as he wrote them up they will not work, to unlock their effectiveness you need to properly understand scaling. Gann's teaching is phenomenal when used with the correct scaling principles and forms the roots of the Market Geometry school of TA that many have built on and made more accessible since. His non-esoteric basic trading rules such as "old tops often make new lows" and Gann swing theory are still as valid today as the were in early 1900's particularly when primarily trading off daily, weekly and monthly charts. There is a lot of Gann material and it deserves full attention, something my mentor constantly said to me when I struggled with the sheer complexity of it all was ".....you don't get to be a doctor without knowing a lot of biology".

Elliott made a phenomenal contribution to TA and has brilliant predictive characteristics for those who 'get it'. My mentor believes that the purist Elliott users who try to label every wiggle in price eventually go insane and it's best to work with recognisable patterns of the common wave sequences such as 5/3 or 5/5, plus build a thorough understanding of the structural principles of simple vs complex correction types, typical fib proportions in price and time of each wave, alternation principle, ending diagonals, subdivision of wave sets, fib clustering etc. There are a mountain of useful predictive probabilities that arise from a thorough knowledge of the structural characteristics of your typical 5 wave set.

I should clarify something at this point for those who may not realise (a lot of you guys on here obviously already know this). Systems trading and discretionary trading are two completely different schools of thought....

A systems approach is basically technology driven with complex algos and programming, backtesting, monte carlo simulation, various methods of risk evaluation and is immensely complex. Big institutions can afford to make it work but few mortals ever will due to most attempts suffering from the disease of curve fitting and the fact that markets change character. The idea has always been to get a computer to trade for you and remove the human element. Good in theory but it's damn near impossible to teach a computer to trade!! The problem is markets will change character over time and a mechanical system that works for a period of time will suddenly stop working.

A discretionary approach is built upon the skills, ability and decision making of a human being. Inevitably the trader's breadth of knowledge including fundamentals, current news, understanding of sentiment, market knowledge, seasonality, etc will influence the over all bias and outcomes and many who favour this approach are highly eclectic in their understanding of markets and have a clear long/short bias before they even come to the TA portion of their decision making process.

The majority of large position holding non-commercial private traders who commonly hold multi million dollar positions (such as Tim Morge) prefer a discretionary approach.

In the world of discretionary trading since Gann-Elliott we have been fortunate to have publications by modern masters such as Andrews, Babson, Morge, Kennedy, Proctor, Jenkins, Pesavento, Borodin, Miner, Kane, Carney and others all of whom have discovered a pathway to a genuine edge with related characteristics and yet each have their own unique style (@Xenia made a very valid point - knowing yourself is true wealth, in fact it's written at the top of my site). I have a recommended TA and trading psychology book list that is a guaranteed cure for insomnia - if anyone wants it let me know.

 

@Alex Straker I love the title "financial life coach"
Are you on FB? Just tried to look you up.

 

That all sounds very complicated and I think it will go against how most people want to invest here - passively.

 

I had a look at your website. The relative strength sector rotation video was very interesting. You've obviously put an enormous amount of effort into all this.

Robert Kratz the man behind Fibbonacci Trader and my futures trader friend were huge believers in manual backtesting. Yes painfully slow but you became one with that particular market if you know what I mean. Something a computer can never do.

Having a great trading system based on these principles is one thing. But it's essentially a probabilities game. And of course that's where psychology and money management are critical.

I can see now that you are very much the professional in this area as opposed to me which is essentually nothing more than a mug punter if I was to trade nowadays. Fortunately my circumstances are such that I don't need to. Maybe one day I might put some cash aside for discretionary trading. But given my obsessive nature I don't think my wife would be too keen on me venturing back into the world of trading.

And yes you're right about the Big G. We'd be burnt at the stake if we ventured down that path. Swing trading sounds less esoteric. Once success is experienced at that level then the trader is more open minded to the more esoteric concepts.

Cheers

 

Hey @Foxdan, yes agree, this point has been made by many posters including myself and it's definitely for the best that way. Again read my previous posts I am not one dimensional in my views and advocate everyone needs accumulation planning first. Guess I'm back to hanging out with my mentor on AOL and just when I was starting to like you guys

Success is always relative to your goals...... and so is the outcome.

@Xenia Taa, yes I'm on FB but don't use it much to be honest.

 

New views are always welcome, stick around and post regularly. New ideas are good and everyone can learn from different methods.

 

@Alex Straker can you start your own thread on how you think the average person can use active trading as part of a long term strategy? I think most people here don't understand it but generalsed information in the forum helps to start discussions and then serves as a place to start educating yourself.
It will also help the forum members understand you and your services without needing to sound like a sales pitch.

 

@austing I'm honoured that you have taken the time to look in to my work, thanks for your kind words.

@Foxdan yep certainly happy to do this.

 

Hi @Alex Straker

1. What kind of TA method do you favour and why?

Price action - I spent nearly 5 years looking at charts and found that all the indicators I used told me nothing that price over various time frames didn't.

2. Have you ever been mentored in or studied Market Geometry?
No, I've never heard of it.

3. If 'Yes' to Q2, who were you mentored by and what MG linage do you descend from?
n/a
4. Does anyone understand what I mean by the phrase 'squaring of price and time'?
Nope!

5. Do you apply TA concepts currently in your overall decision making in markets?
Yes always.
6. In the context of a well developed trading plan/strategy, which is more important to long term success - TA skills or a proven Money Management system?
Money management system.

 

OK, let's play.

1. What kind of TA method do you favour and why?

Why would I disclose such method when it beats the 90%?
Although I do use swing charts as per original definition and a couple MAs.

I have hundreds of these trade screen shots on many diff time frames, and much of my trading and predictions is on various blogs over the net.
I'll let other guess the rest.





Here is the last trade, closed a 1 July 12:30am




2. Have you ever been mentored in or studied Market Geometry?

99% of it is total nonsense starting from trading failure Bryce Gilmore.
And thus I would bet that nobody here can profitably trade using geometry.
Sure it can be used as a yard stick, but not predictive market movements.

3. If 'Yes' to Q2, who were you mentored by and what MG linage do you descend from?
Mentor...Lineage? ROTFPMSL!!!
Just cause you need mentors don't mean i do.
And just because you hang around someone who trades doesn't mean you can too.
Even though there is hardly a method or book published that I have not tested with real money.

OK here is my trading lineage


4. Does anyone understand what I mean by the phrase 'squaring of price and time'?

It is a Gann concept and from what I see on your videos you also have no idea how he did it, applied it or taught it.
Once again Bryce is wrong on this as is almost everything else.
And there's a bit more to it than putting up 1x1 and 1x2 lines.

5. Do you apply TA concepts currently in your overall decision making in markets?

I can and have traded using only MAs crossings, though time spent looking at charts is a factor.

6. In the context of a well developed trading plan/strategy, which is more important to long term success - TA skills or a proven Money Management system?

MM is another simple concept taken to a completely useless level.
Risk reward is the biggest fallacy in the trading business, sells lots of books and courses though.

And a pretty trading picture in case one day i want to sell trading courses

 

Please let me know where I can sign up, am also willing to pay more if you can give it a fancy name and a money back guarantee.....

 

Actually a dude made a bit of $$ calling it rainbow trading a few years ago.
He even got a gig as an account manager for a reasonable size account.

The Magic Rainbow $499
Rainbow Trader $699
Fibonacci Rainbow $999

 

and Google has just gone down flooded with "rainbow trading" searches